FX.co ★ Trading Signal for XAU/USD (gold) for May 25 - 26, 2021: Key Level $1,884

XAU / USD (Gold) has formed an ascending wedge pattern. At this moment, in the European pre-market, the metal is trading below this pattern, and below the 8/8 of murray with a slight bearish bias. However, we should expect a consolidation below $1,875.

The confluence level around $1,875, where the 4-hour uptrend channel converges, and the 21 SMA, is the key level. If Gold trades below this zone, there could be a bearish sequence until the first support at $1,843 (7/8).

In the chart, we can also note the formation of a double top in the $1,889 area. This level has acted as strong resistance that since May 19 has been consolidating inside a range of $1,889-1,870.

The sharp break above or below this level of ranges will define the following direction. Apparently, the break to the downside of the bullish wedge could be confirming a new bearish wave of Gold.

The eagle indicator from the $1,889 area has been showing a bearish divergence. At this time, it shows a negative signal for gold. In the next few hours, it could find support at the 7/8 murray level around $1,843.

The market sentiment about gold shows that investors are looking to take refuge in gold as a safe asset amid the stock market volatility, the fall of cryptocurrencies, and inflation fears.

The sentiment will be bullish for gold in the medium term. So, as long as Gold remains above the EAM of 200 located at $1,800 in the medium term, it will continue its upward path until reaching the level of $2,000 as the next target.

Our recommendation is to sell if there is a pullback to confirm the break of the bullish wedge, towards the 1$,885 resistance, or a break below the 8/8 SMA around $1,875 with targets at $1,850 and $1,843.

Support and Resistance Levels for May 25 – 26, 2021

Resistance (3) 1,892

Resistance (2) 1,886

Resistance (1) 1,880

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Support (1) 1,868

Support (2) 1,862

Support (3) 1,851

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Trading tip for XAU/USD (gold) for May 25 - 26, 2021

Sell during a pullback to 1,884 (bullish wedge) with take profit at 1,860 and 1,843 (7/8), stop loss above 1,892.

Sell below 1,875 (8/8 of murray) with take profit at 1,850 and 1,843 (7/8), stop loss above 1,885.